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Zimbabwe: China's friend in need?

From Nkepile Mabuse, CNN
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China's relationship with Zimbabwe
STORY HIGHLIGHTS
  • Sanctions-hit Zimbabwe has sought economic support from China
  • China has signed a $700 million-loan aimed at rejuvenating Zimbabwe's agricultural sector
  • Zimbabwe mainly imports mobile communication hardware from China

(CNN) -- Shunned by Western investors, economically ravaged Zimbabwe has turned its sights to the East to improve its finances.

International isolation and a bad credit record have forced Zimbabwean president Robert Mugabe to seek economic support from China, the world's second-largest economy.

Since 2002, the European Union and the United States have imposed sanctions on the mineral-rich southern African country amid reports of human rights abuses, political violence and the controversial land reform policy targeting white farmers.

China has moved to occupy some of the void created by the exodus of Western businesses and now Zimbabwe's once-empty stores are filled with Chinese products.

"We are happy to have these people coming to Zimbabwe opening factories and shops, because when you compare to last time, there were more unemployed youths," says Never Jacob, a Zimbabwean store manager.

"For me, I can say (of) the coming of Chinese to Zimbabwe, we appreciate their coming," he adds.

China has been doing business with Zimbabwe for years -- Chinese foreign minister Yang Jiechi has said in the past that the two economies "are cut out for each other."

I can say (of) the coming of Chinese to Zimbabwe, we appreciate their coming.
--Never Jacob, store manager, Zimbabwe
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China has also called for the lifting of sanctions against Zimbabwe, saying that no country has a right to interfere in the internal affairs of another state.

And last month, it announced a $700 million-loan aimed at, among other things, rejuvenating Zimbabwe's agricultural sector.

But local economists say, overall, Chinese investments in Zimbabwe are difficult to quantify.

"Some of the projects are not easily accessible to the public and we are not given many details about how much work is done or what production has taken place," says economist John Robertson.

CNN's attempts to get figures from the Zimbabwean government about its economic partnership with China were unsuccessful.

But according to figures obtained from the Chinese embassy, the trade between the two countries totaled $560 million dollars last year -- just under half a percent of total China-Africa trade in 2010.

Chinese imports made up nearly 60% of that business, with Zimbabwe importing mainly mobile communication hardware. Its number-one export to China was, apparently, tobacco.

The Zimbabwean Minister of Investment Promotion says the Chinese are mainly interested in mineral resources, including diamonds.

Last year, Zimbabwe's efforts to improve its fragile economy seemed to be given a boost when the country was allowed to sell diamonds from its controversial Marange fields.

There are currently five companies -- two of which are Chinese -- with licenses to operate in the diamond fields near the Mozambique border.

These mines are under export controls following allegations of human rights abuses by Mugabe's Zanu-PF party. China is said to be complying with those international controls.

Zimbabwe's finance minister Tendai Biti, whose party, the Movement for Democratic Change, formed a unity government with Mugabe's party two years ago, says that diamonds have not yet provided the financial boost that many would have expected, contributing only $35 million to the country's coffers last year.

Mugabe's Zanu-PF party denies accusations of looting and abuses, while Biti blames smugglers for robbing the country of much-needed revenue.

"These diamonds are alluvial, so you can literally mine them with a spoon or the sole of your heel," says Biti.

"They are located in a place that is 66,000 hectares, so that's half the size of the United Kingdom, so what it means is that there is porousness -- anyone can virtually walk in there and pick stones," he adds.

China has been silent on the issue, choosing rather stick to its policy of non-interference in the internal matters of other countries.